3 tips to improve the ‘first mile’ of your supply chain

Overhauling how your business manages its supply chain is a daunting task, but a good starting point is to look at a segment of the supply chain and focus on three tips: clean your data to improve visibility, automate supplier collaboration and consider what new technology is available to you to make these things happen.

The specific part of the supply chain that many organizations would benefit from focusing on is the “first mile” — when businesses set a solid foundation to work with suppliers, engage services and order direct materials. In our previous article, “How ‘first-mile’ flaws hinder last-mile success,” we discussed the problems that snowball, add to risk and cut into margins.

Now, let’s dig into the top three tips for addressing these problems:

3 Tips to Improve the First Mile

  • Clean your data to improve visibility — Ensure that your ERP reflects reality, so that your business can run on accurate, up-to-date information. Doing so increases trust in ERP data and cuts down on time spent managing costly surprises.
  • Automate supplier collaboration — Communicate with suppliers in real time via a centralized interface that integrates with your ERP. This approach creates a single source of truth, saving your company time and money, building trust in the supply chain and creating more strategic relationships with suppliers. We’ll elaborate on this tip later.
  • Consider a tech partner — Achieving the above is not easy on your own. Consider implementing an affordable cloud-based SaaS tool that not only specializes in supplier collaboration and cleaning ERP data, but one that can also manage supplier on-boarding, training and support to help you see ROI even faster.

Let’s take a deeper look at what it means to streamline supplier collaboration.

Across your business, there should be no need to guess about how suppliers are chosen. So you should centralize and automate the way you choose suppliers.

A centralized platform should also manage the supplier PO lifecycle, and it should integrate with your ERP. This allows for visibility and lets you be proactive instead of reactive.

The finance department should not have to manually reconcile or pay invoices. Instead, use a system that matches invoices, POs and receipts so that you never waste time reconciling or paying an invoice that is mismatched from its corresponding PO or the goods you actually received. And, overall, there should be no manual data entry from emails or spreadsheets into the ERP.

The way to improve supplier collaboration blends technology and soft skills. You want a solution that makes enablement and training simple — a solution that is so easy to operate that it requires little training and actually encourages more use by your staff and suppliers. The soft skills come in when suppliers need support. All of these areas can succeed if you focus on supplier experience and offer them a solution that adds value, not more manual work.

Q&A with SourceDay

To get more insight on these issues, we talked with an expert in supply chain efficiency, SourceDay CEO Tom Kieley.

We asked him what he’s seeing as businesses consider how to improve their supply chains.

Spend Matters: What is clean data?

Tom Kieley: Most manufacturers can’t and don’t trust the data in their ERP systems. Lead times and due dates are inaccurate, pricing changes are not reflected on POs, and late or incomplete shipments all contribute to a lack of faith in the system. It’s truly a miracle that any order ships on time. Prioritizing the first mile by giving both buyers and suppliers a real-time view of accurate order data allows your costly ERP system to work as intended, restoring trust in the process.

Spend Matters: What does it take to trust your supply chain?

Tom Kieley: Trust is built through visibility and accountability between everyone in the supply chain, starting with the first mile. When that critical stage is managed through email, phone calls and spreadsheets, neither side knows where any given order stands. There's no need to manage your supply chain that way anymore — technology can centralize and automate collaboration so we can stop worrying and trust that our buyers and suppliers will meet their commitments to each other.

Spend Matters: How do you improve supplier collaboration? What are the benefits?

Tom Kieley: True supplier collaboration requires a single source of truth with real-time data building awareness as exceptions happen. In a truly collaborative procurement process, procurement teams and suppliers can hold each other accountable, build trust and drive costs down. Ideally, this begins as early as the RFQ process.

Improved Outcomes

Tina Grow, the IT director at the manufacturing company Rocore, has leveraged the SourceDay solution to focus on these three areas.

It has “changed everything in the best way possible,” Grow said in a case study. “We can see shipping dates and shipping confirmations, what orders are hot and which vendors need prompting — all in one place, visible to all stakeholders."

Just a few years ago, addressing these types of challenges in the supply chain was more  complicated and costly for many organizations. Legacy, on-premise software technology solutions made implementation more expensive and slow. The fact that they were limited to single instance-ERP integrations was another limitation that prevented broad adoption. Today’s cloud-based solutions are easier to use, faster to implement and agnostic to the ERP systems they update. Now it’s possible for more and more organizations to fix what’s broken without eating up precious resources in the process.

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